ECUADOR Law and Practice Contributed by: María Celeste Alvarado, Jorge Sicouret Zea, Ángel Gaibor and Octavio Rosselli, Coronel & Pérez
• The aggregate turnover in the last fiscal year of the parties to a combination exceeds (in units of basic unified wage (BUW), an indica - tor of the minimum wage, which for 2025 is USD470) (i) BUW3,200,000 for transactions involving financial or securities institutions; (ii) BUW214,000 for transactions involving insurance or reinsurance companies; and (iii) BUW200,00 for transactions involving other companies. • For parties that are engaged in the same economic activity, a market share equal to or greater than 30% of the relevant market is acquired as a consequence of their combina - tion. Additionally, if any of the thresholds referred to in 4.2 Material Shareholding Disclosure Thresh- old are met, regardless of the turnover or the market share, the Superintendence of Economic Competition must give its prior approval to the potential tender offer for it to be authorised by the Superintendence of Companies, Securities and Insurance. 2.5 Labour Law Regulations Shareholders domiciled in Ecuador who own more than 25% of a company’s outstanding shares have secondary liability with respect to any and all obligations towards employees derived from labour law incurred by the target company. Those obligations include, but are not limited to, payment of a percentage of the company’s profit and the provision of a retire - ment pension, regardless of whether the former employee is entitled to receive a pension from the social security system. 2.6 National Security Review There is no formal mandatory national security review of acquisitions in Ecuador. However, if the acquisition pertains to a sector considered as
strategic by the Constitution, (energy, telecom - munications, non-renewable natural resources, transportation and refining of hydrocarbons, biodiversity and genetic heritage, radioelectric spectrum and water), the government will proba - bly impose additional conditions or other restric - tions on acquisitions that could be deemed to affect national interests. 3. Recent Legal Developments 3.1 Significant Court Decisions or Legal Developments In 2023, a general amendment to the Compa - nies’ Law was enacted regulating, among oth - er things, the redemption of the shares of the acquiring company owned by the target com - pany upon a merger and the possibility of hav - ing, in certain circumstances and above certain thresholds, the merger approved by the legal representative of the target company instead of the shareholders. 3.2 Significant Changes to Takeover Law There have been no material changes to the Companies’ Law in the last 12 months, and there are currently no plans to do so either. Mul - tiple secondary regulations indirectly related to takeovers have been updated, mainly in connec - tion with corporate governance and anti-money laundering measures. 4. Stakebuilding 4.1 Principal Stakebuilding Strategies Due to the limited number of public listed com - panies and the concentration of the controlling interests thereof in families or close-knit eco - nomic groups, hostile takeover tenders are unu - sual. Therefore, stakebuilding in advance can -
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